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Uninor’s West Bengal staff opposes plan to shut operations

Kalyan Parbat

Norwegian telecom group Telenor's Indian arm, which only recently emerged out of a bitter fight with its local partner, is now at the centre of another dispute — this time with a group of its employees in eastern India.

| ET Bureau | Updated: Dec 26, 2012, 11.21AM IST

Hundreds of employees of the Indian arm Uninor's Kolkata and West Bengal circles have asked Norway's governmen... Read More

KOLKATA/NEW DELHI: Norwegian telecom group Telenor's Indian arm, which only recently emerged out of a bitter fight with its local partner, is now at the centre of another dispute — this time with a group of its employees in eastern India.

Hundreds of employees of the Indian arm Uninor's Kolkata and West Bengal circles have asked Norway's government to investigate a decision by the company's management to shut down operations in the two regions next month, businesses they claim were profitable and which the company had originally decided to keep.

Some 726 employees who include the senior management of the firm's Kolkata and West Bengal circles, under the banner Uninor Employees of Bengal, have sent a letter to Norway's Trade and Industry Minister Trond Giske denouncing the decision to shut operations in both these regions from January 19.

In their communique, copies of which have been marked to all Telenor board members and the firm's global CEO Jon Fredrik Baksaas, these employees have questioned the logic of shutting down what they said were two of Uninor's most profitable circles.

These employees have urged Giske, whose government is a significant shareholder in Telenor, to investigate why the Indian arm did not bid for spectrum in West Bengal and Kolkata after initially suggesting that it would be interested in having operations in these circles.

The base price in the auction for these circles was well below regions such as Maharashtra, Andhra Pradesh Gujarat, UP-West and Bihar, they said.

Some of these employees told ET that Uninor's India management had misled Telenor and claimed that they were given the impression even a week before the November auction that the company would seek to repurchase airwaves in both circles. When Uninor, a one-time joint venture between Telenor and real estate group Unitech and one of the hardest hit by the Supreme Court verdict earlier this year cancelling 122 mobile permits issued by former telecom minister A Raja, announced plans to reduce operations in four nonprofitable circles in July, both Kolkata and West Bengal did not figure in that list.

The two circles were among its nine priority circles. A middlelevel executive in its Kolkata circle claimed the company's managing director Sigve Brekke had recently informed employees in West Bengal that "the company did not repurchase spectrum in Kolkata and West Bengal circles as he (Brekke) was advised at the last minute not to do so".

This executive, who asked not to be identified, claimed that Brekke had said this in response to a specific query during a Town Hall meeting with employees in Kolkata and Bengal on why the company did not bid for spectrum in these two growth markets. But Telenor called these allegations baseless, adding that the decision not to bid for these two circles was taken at the group level.

"There is no truth whatsoever in any of these suggestions. As we have said before, this business closure results from the licence cancellation ordered by the Supreme Court and auction rules compelling us to repurchase spectrum at seven times higher cost to continue," a Telenor group spokesman said in a written response to ET's queries on whether the Brekke had been misled by key advisors into not bidding for spectrum in Kolkata and West Bengal.
"We have therefore had to make the difficult decision of prioritising circles on the basis of reserve price and business case and have been able to retain over 80% of our subscribers and 83% of our (India) workforce."

The Scandinavian telecom group also denied there were any differences on the India strategy between the parent and the Uninor management following the latter's decision not to bid for airwaves in Kolkata and West Bengal. It also brushed aside suggestions about the Norwegian government being upset with Uninor's decision.

"As we have not received any such communication from the Norwegian government, we are unable to comment on baseless speculations," the spokesman said.

Telenor did not respond to queries on the protest note sent by Uninor's employees. Telenor plans to give out higher than contractual compensation to employees impacted by the decision to shut operations in Kolkata and West Bengal.

"Licence cancellation will have negative consequences on all affected. (But) employees will receive a higher than contractual compensation and outplacement agencies will be hired to secure employment outside the company," the Telenor spokesman said, adding that "Uninor had also approached competitors in Kolkata and West Bengal to offer its talent for placement".

Telenor is among the nine telcos whose mobile permits were cancelled by February's Supreme Court verdict. These operators have permission to use their allocated airwaves till January 18.

Uninor has dropped the 90-day lock-in to allow customers in Kolkata and West Bengal to port out even if they have taken a connection less than 90 days ago. Its Indian unit has 5.6 million customers in Kolkata and West Bengal. In last month's auction, the Norwegian telco was able to retain airwaves in six circles, excluding Mumbai, Kolkata and West Bengal.

It secured 5 MHz of airwaves in UP East, UP West, Bihar, Andhra Pradesh, Gujarat and Maharashtra, which allows it to continue operations for another 20 years in these regions. Together, these six circles account for over half of India's population.

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